What Car Do You Need For Uber – A new option allows passengers to request an electric or hybrid vehicle for an additional charge. Uber aims to switch all US drivers to EVs by 2030
Uber has expanded its program, which hopes to incentivize drivers and passengers to use EVs or hybrids, to NYC. Uber Green allows passengers to request a hybrid or electric vehicle at a premium price (refer to screenshot). Uber Pass members also receive a 10% discount on all Green rides plus 3x the reward points. It should also be noted that drivers will receive an additional $0.50 of a $1 ride surcharge for each Green trip completed. Uber Green’s expansion is part of the company’s $800 million investment to transition thousands of drivers to electric vehicles by 2025, with plans for all ride-sharing drivers in the United States to have EVs by 2030.
What Car Do You Need For Uber
“The launch of Uber Green and our commitment to electrifying vehicles on our platform are important parts of our larger efforts, and we will continue to take bold steps to tackle climate change head-on” – Harry Hartfield, public affairs manager for Uber in New York
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So now is the time for NYC TLC drivers and fleets to switch to electric vehicles? (Note: I realize that hybrids can also be used on the Uber Green platform, but my focus will be on EVs given Uber’s stated goal to transition all drivers to fully electric vehicles) Below, I share some thoughts about using EVs for NYC’s TLC industry and why adoption rates may be muted in the near future.
Let me start by saying that I think electric vehicles will dominate new car sales (not used car sales) by 2030. Electric vehicles are undoubtedly the future. However, driving an EV today is a difficult proposition for for-hire drivers and fleets in NYC for several reasons. To be clear, I am not arguing against the adoption of electric vehicles, but rather pointing out some of the key issues preventing wider adoption of electric vehicles among the driver community and the NYC TLC fleet (i.e. only 0.3% of all TLC vehicles that are currently EVs. ). I know many companies, drivers and entrepreneurs (I hope to be among them) will help solve the challenges below. This is just a snapshot of today’s reality and specific to NYC’s transportation market for hire (i.e. the same may not be true for another city).
Many NYC drivers will point to a lack of charging infrastructure as a major barrier to purchasing an EV. Unlike other ride-sharing markets, NYC drivers often don’t park in an indoor garage at home where a charger can be installed. Additionally, paying for indoor parking with a charger is also too expensive (i.e. costs at least $400 per month) and inconvenient (i.e. not close to home) for most drivers.
Given NYC’s unique parking dynamics, a “fast charge” infrastructure is what many drivers and fleets would look for before purchasing an EV. For example, a TLC driver will want to be able to recharge their vehicle’s range (ie at least 60% to 80% of a full charge) in less than 20 or 30 minutes. Currently, there are three main types of chargers: Level 1, Level 2, and Level 3, often called a DC Fast Charger.
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Based on the diagram above, what most drivers will be looking for are DC Fast Chargers. New York State provides a useful and dynamic EV charger map (map link) that we can refer to. As you can see below, there are currently less than 25 public DC Fast Charge stations in NYC! (Note: A charging station can have multiple individual chargers) More will come with time, but to serve the 95,000+ TLC vehicle fleet the current charging infrastructure is far from where it needs to be.
When many think of the range of an electric vehicle, they often don’t convert it into MPG equivalents (i.e. very few people say a full tank of gas has 400 miles of range). For example, if Tesla’s Model 3 has 350 miles of range on a full charge, many assume that means the car will drive about 350 actual miles before needing to be recharged. However, that range is an estimate for driving without traffic in ideal weather. In fact, 350 miles of range can turn into 100 NYC miles, given traffic dynamics and weather (ie heater or A/C is on). You can see this mentioned by Rami, a TLC driver who is currently driving one of the first Tesla yellow cabs in NYC
Although NYC’s ridesharing industry is dominated by just a few cars, notably the Toyota Camry, TLC drivers and fleets still like to have options. Currently, only a handful of EVs are viable for the TLC industry (ie Tesla Model 3/Y, Chevy Bolt, Nissan Leaf, Kia Niro). Additionally, many of these vehicles cannot be acquired, and cost more than $40,000 (including sales tax), a high entry price point for many drivers.
The lack of an independent service and parts ecosystem for EVs, specifically Tesla, is something that many don’t think about but understand when it’s explained. What do I mean by this?
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Tesla, taking a page out of Apple’s playbook, does not allow third parties to service its products. This is very unusual for the car industry and will be uncomfortable for many drivers and fleets. Some reasons why this is true.
For example, Tesla has one main service center in NYC in Red Hook (Brooklyn). Although the center’s overall score is high, if you sort out what drags the score down, service issues seem to cause a lot of problems for customers. My main point is not that Tesla dealers are worse than other OEM dealers, but that if you own a Tesla, you have no alternative service and repair (i.e. if you don’t like the Toyota dealer there are many from mechanics or other service providers you can go to, including DIY). Since Tesla’s scale fleet has only been around for a few years, it will be important to track Tesla’s customer service experience, especially those who use it for TLC work. Finally, it’s also important to consider whether Tesla voids warranties, specifically the critical battery warranty, if their vehicle is used commercially (i.e. ride sharing). Replacing or repairing a degraded or malfunctioning battery can be extremely expensive.
All of the above said, Tesla (or other electric vehicle companies using a similar strategy) could open more service centers and/or change its third-party policies. So this commentary only reflects today’s reality.
Technological obsolescence is when a technical product or service is no longer needed even though it may be working properly. There are several real life examples that all of us have seen in our lifetime (i.e. VHS < DVD < streaming OR original iPhone < iPhone 5 < iPhone 12). There is no reason why this type of technology progression will not happen in the electric vehicle industry.
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Today, Tesla’s Model 3 can have 350 miles of range and take 20 minutes to charge (DC), but in 4 years the 2025 Model 3 may be able to have 600 miles of range and charge in 5 minutes (solid state battery). While over-the-air updates can help improve older technology, it’s likely reasonable to assume that some hardware upgrades that would effectively make older models technologically obsolete over time. The reason why this is very different and an important consideration as it relates to EVs, is the initial cost of the technology product becoming obsolete. Most people didn’t feel the impact of their DVD player or iPhone was gone because the financial impact was relatively small. A $45,000 vehicle that becomes obsolete in 4 years will have a significant financial impact on most, including drivers and fleets.
While the above analysis sounds like I’m anti-EV, the opposite is actually true. I believe EVs should and will dominate the NYC ride sharing industry over time. However, there are some commercial considerations that TLC NYC drivers and fleets must uniquely weigh before deciding to switch to electric vehicles. Today, I think it’s too early for most NYC TLC drivers and fleets to make the switch, but that opinion could change as new cars, technology and infrastructure become available. I look forward to writing more about EVs and I hope you enjoyed the article. Let me know your thoughts too.
TLMKT Newsletter is written by Dawood Mian, Founder and CEO of TLC Market. It covers the NYC ride sharing industry and related news. Search TLC Marketplace for cars, parts, tires, mechanics, reviews and more. Find great deals at TLMKKT.COM.
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